Looking for a deal on a new development rental in NYC? Head to the outer boroughs
As a renter these days, you’re more likely to get a deal on a new lease if you’re apartment hunting at new developments, and you’re even more likely to find a deal if you’re looking at new developments in the outer boroughs.
That’s because new development makes up a greater chunk of the rental market in Brooklyn and Queens than it does in Manhattan, where developers have focused on building new condos in recent years.
Douglas Elliman’s Manhattan, Brooklyn and Queens rental market report for October 2018 tracked an increase in both median rents and concessions. The report indicates that 87 percent of new development rentals in Queens came with some kind of concession—meaning the landlord pays the broker fee, or offers a month or two free. That figure was 83 percent in Brooklyn and 67 percent in Manhattan.
New development concessions are not new, and the pattern is continuing to rise. Jonathan Miller, president of the appraisal firm Miller Samuel and author of the report, calls his numbers “conservative.” In Manhattan, the market share of concessions rose year over year for the 41st consecutive month, according to the report, while Brooklyn reached its second highest concession market share in more than eight years
What does that boil down to for renters? If a new development apartment doesn’t come with some kind of concession, it’s definitely something to ask for, he says. These rentals are typically priced higher than existing apartments, so landlords are more willing to offer you something to sweeten the deal and lock you in.
Just how big is the new development market compared to existing apartments? In Manhattan, new development represents only 6.3 percent of the rental market, while the share of new development is 25 percent in Brooklyn and 43 percent in Northwest Queens, which includes Long Island City, the potential home of Amazon’s HQ2, Miller says.
In Manhattan, the median rental price increased 2.8 percent to $3,495, however, two- and three-plus-bedrooms were the only size categories to see declining rents and market share.
The median rental price in Brooklyn was $2,923, up 4.4 percent, and the rental price per square foot also rose 5.2 percent. Thanks to several years of new development activity, new development prices are rising faster than prices for existing rentals.
For Queens, new development rents accounted for nearly 43 percent of all activity, and this factor is also skewing prices higher. While the median rental price was $2,929, nearly flat compared to a year ago, the rental price per square foot rose 9.6 percent.
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